TIS (3626) Q1 2025 earnings summary

Executive summary

• Net sales increased 3.6% year-over-year to ¥134,055 million, driven by business expansion, IT investment, and digital transformation demand.

• Operating income declined 1.7% year-over-year to ¥14,061 million, mainly due to the completion of large-scale projects and unprofitable contracts.

• Net income attributable to owners rose 5.2% year-over-year to ¥10,679 million, supported by extraordinary gains from sales of investment securities.

• Orders received and order backlog both increased year-over-year, reflecting robust software development activity.

• A new three-year Medium-Term Management Plan (2024–2026) was launched, focusing on sustainable growth, value creation, and business domain expansion.

Financial highlights

• Net sales: ¥134,055 million (+3.6% YoY); Operating income: ¥14,061 million (-1.7% YoY); Net income: ¥10,679 million (+5.2% YoY).

• Gross profit increased 3.3% YoY to ¥36,118 million; gross profit margin slightly decreased to 26.9%.

• Operating margin declined to 10.5% from 11.1% YoY.

• Extraordinary income of ¥1,987 million, mainly from gain on sale of investment securities.

• Comprehensive income for Q1 FY2025 was ¥12,287 million, down 12.4% YoY.

Outlook and guidance

• FY2025 forecast: Net sales to rise 1.1% to ¥555,000 million; operating income up 3.0% to ¥66,500 million; net income expected to decrease 8.3% to ¥44,800 million.

• ROE projected at 13.9%, down from 16.0% in prior year.

• No changes to previously announced earnings or dividend forecasts; total return ratio targeted at 50%.

• Growth investment in human resources and R&D to continue.

• Management expects sustainable growth through high-value businesses and productivity enhancements.